Allergan Reports Third Quarter 2013 Operating Results

  Allergan Reports Third Quarter 2013 Operating Results

Business Wire

IRVINE, Calif. -- October 29, 2013

Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter
ended September 30, 2013. Allergan also announced that its Board of Directors
has declared a third quarter dividend of $0.05 per share, payable on December
11, 2013 to stockholders of record on November 20, 2013. As a result of
Allergan’s approved plan to sell its obesity intervention business unit, the
financial results from that business unit are reported as discontinued
operations in the financial tables of this press release. Prior year amounts
have been retrospectively revised for the discontinued operations.

Operating Results Attributable to Stockholders from Continuing Operations

For the quarter ended September 30, 2013:

  *Allergan reported $1.10 diluted earnings per share attributable to
    stockholders compared to $0.82 diluted earnings per share attributable to
    stockholders for the third quarter of 2012.
  *Allergan reported $1.23 non-GAAP diluted earnings per share attributable
    to stockholders compared to $1.04 non-GAAP diluted earnings per share
    attributable to stockholders for the third quarter of 2012, an 18.3
    percent increase.

Product Sales from Continuing Operations

For the quarter ended September 30, 2013:

  *Allergan reported $1,528.4 million total product net sales. Total product
    net sales increased 12.9 percent compared to total product net sales in
    the third quarter of 2012. On a constant currency basis, total product net
    sales increased 14.0 percent compared to total product net sales in the
    third quarter of 2012.

       *Total specialty pharmaceuticals net sales increased 12.8 percent, or
         13.9 percent on a constant currency basis, compared to total
         specialty pharmaceuticals net sales in the third quarter of 2012.
       *Total medical devices net sales increased 13.4 percent, or 14.6
         percent on a constant currency basis, compared to total medical
         devices net sales in the third quarter of 2012.

“We are pleased with our continued broad based double digit sales and earnings
growth performance during the third quarter driven by both our pharmaceutical
and medical device businesses,” said David E.I. Pyott, Allergan’s Chairman of
the Board and Chief Executive Officer. “Furthermore, we are excited by the
recent FDA approvals of JUVÉDERM VOLUMA™ XC and BOTOX® Cosmetic for crow’s
feet lines.”

Product and Pipeline Update

During the third quarter of 2013:

  *On September 11, 2013, Allergan announced the approval by the U.S. Food
    and Drug Administration (FDA) to market BOTOX® Cosmetic
    (onabotulinumtoxinA), for an additional indication to temporarily treat
    moderate to severe lateral canthal lines, commonly known as “crow’s feet”
    lines. BOTOX® Cosmetic is the first and only product of its kind approved
    for this indication.
  *On September 25, 2013, Allergan announced that it had entered into a
    license agreement pursuant to which, upon closing, Allergan will pay
    Medytox an upfront payment of U.S. $65 million and Medytox will grant
    Allergan exclusive rights, worldwide outside of Korea, to develop and, if
    approved, commercialize certain neurotoxin product candidates currently in
    development, including a potential liquid-injectable product. Pursuant to
    the agreement, Allergan has also agreed to make additional contingent
    payments upon achieving certain development and commercialization
    milestones and pay royalties on product sales. The closing of the
    transaction is contingent on obtaining certain government approvals.

Following the end of the third quarter of 2013:

  *On October 23, 2013, Allergan announced that it had received approval from
    the U.S. Food and Drug Administration (FDA) to market JUVÉDERM VOLUMA™ XC,
    the first and only filler approved to temporarily correct age-related
    volume loss in the cheek area in adults over the age of 21.
  *On October 23, 2013, Allergan announced that VISTABEL® received a Positive
    Opinion from the Agence Nationale de Sécurité du Médicament et des
    Produits de Santé (ANSM) for the temporary improvement in the appearance
    of moderate to severe lateral canthal lines (crow’s feet lines) seen at
    maximum smile, either alone or when treated at the same time as glabellar
    (or frown) lines seen at maximum frown in adult patients. This is an
    important step towards securing national licences in the twenty seven
    countries of the European Union as well as Norway and Iceland.
  *On October 28, 2013, Allergan entered into a definitive agreement to sell
    its obesity intervention business to Apollo Endosurgery, Inc. for an
    up-front cash payment of $75 million, subject to certain adjustments, and
    certain additional consideration, including a $15 million minority equity
    interest in Apollo and contingent consideration of up to $20 million to be
    paid upon the achievement of certain regulatory and sales milestones. The
    transaction is expected to close in 2013, subject to customary closing
    conditions. In the third quarter of 2013, Allergan recorded an additional
    non-cash pre-tax disposal loss of $58.7 million ($37.6 million after tax)
    from the write-down of the obesity intervention business unit assets held
    for sale to their estimated fair value based on the terms of the sale
    agreement.

Outlook

For the full year of 2013, Allergan expects:

  *Total product net sales between $6,125 million and $6,200 million, which
    excludes the obesity intervention business.

       *Total specialty pharmaceuticals net sales between $5,295 million and
         $5,350 million.
       *Total medical devices net sales between $830 million and $850
         million.
       *ALPHAGAN®  franchise product net sales between $470 million and $480
         million.
       *LUMIGAN®  franchise product net  sales between $620 million and $640
         million.
       *RESTASIS® product net  sales between $900 million and $920 million.
       *BOTOX® product net  sales between $1,960 million and $2,000 million.
       *LATISSE® product net  sales at approximately $110 million.
       *Breast aesthetics  product net  sales between $380 million and $390
         million.
       *Facial aesthetics product net  sales between $450 million and $460
         million.

  *Non-GAAP cost of sales to product net sales ratio at approximately 13%.
  *Non-GAAP other revenue at approximately $100 million.
  *Non-GAAP selling, general and administrative expenses to product net sales
    ratio at approximately 38%.
  *Non-GAAP research and development expenses to product net sales ratio at
    approximately 16.5%.
  *Non-GAAP amortization of intangible assets at approximately $10 million.
    This expectation excludes the amortization of certain intangible assets
    associated with business combinations, asset purchases and product
    licenses.
  *Non-GAAP diluted earnings per share attributable to stockholders from
    continuing operations between $4.74 and $4.76, which includes the dilutive
    impact of the acquisition of MAP Pharmaceuticals, and excludes the 2012
    impact of the Research and Development tax credit, which was signed into
    law on January 2, 2013 and retroactively reinstated to January 1, 2012.
  *Diluted shares outstanding at approximately 302 million.
  *Effective tax rate on non-GAAP earnings from continuing operations between
    26% and 27%.

For the fourth quarter of 2013, Allergan expects:

  *Total product net sales between $1,585 million and $1,660 million, which
    excludes the obesity intervention business.
  *Non-GAAP diluted earnings per share attributable to stockholders from
    continuing operations between $1.31 and $1.33, which includes the dilutive
    impact of the acquisition of MAP Pharmaceuticals.

In this press release, Allergan reports certain historical and expected
non-GAAP results, including earnings attributable to Allergan, Inc., non-GAAP
basic and diluted earnings per share attributable to stockholders as well as
non-GAAP other revenue, non-GAAP cost of sales, non-GAAP selling, general and
administrative expenses, non-GAAP research and development expenses, non-GAAP
amortization of intangible assets, non-GAAP impairment of intangible assets
and related costs, non-GAAP restructuring charges, non-GAAP interest expense,
non-GAAP other, net, non-GAAP earnings before income taxes from continuing
operations, non-GAAP provision for income taxes, non-GAAP earnings from
discontinued operations, non-GAAP expected loss on sale of discontinued
operations, non-GAAP net earnings and non-GAAP net sales reported in constant
currency. Non-GAAP financial measures are reconciled to the most directly
comparable GAAP financial measure in the financial tables of this press
release and the accompanying footnotes. The information that accompanies the
financial tables of this press release also includes an explanation of why
Allergan uses these non-GAAP financial measures, certain limitations
associated with the use of these non-GAAP financial measures, the manner in
which Allergan management compensates for those limitations, and the reasons
why Allergan management believes that these non-GAAP financial measures
provide useful information to investors.

Forward-Looking Statements

This press release contains forward-looking statements, including but not
limited to the statements by Mr. Pyott and other statements regarding product
development, external corporate development initiatives and strategic
partnering transactions including the transaction with Medytox, the
contemplated sale of the obesity intervention business, market potential,
expected growth and regulatory approvals of LEVADEX® and other products as
well as Allergan’s earnings per share, product net sales, revenue forecasts
and any other statements that refer to Allergan’s expected, estimated or
anticipated future results. Because forecasts are inherently estimates that
cannot be made with precision, Allergan’s performance at times differs
materially from its estimates and targets, and Allergan often does not know
what the actual results will be until after the end of the applicable
reporting period. Therefore, Allergan will not report or comment on its
progress during a current quarter except through public announcement. Any
statement made by others with respect to progress during a current quarter
cannot be attributed to Allergan.

All forward-looking statements in this press release reflect Allergan’s
current analysis of existing trends and information and represent Allergan’s
judgment only as of the date of this press release. Actual results may differ
materially from current expectations based on a number of factors affecting
Allergan’s businesses, including, among other things, the following: changing
competitive, market and regulatory conditions; the timing and uncertainty of
the results of both the research and development and regulatory processes;
domestic and foreign health care and cost containment reforms, including
government pricing, tax and reimbursement policies; technological advances and
patents obtained by competitors; the performance, including the approval,
introduction, and consumer and physician acceptance of new products and the
continuing acceptance of currently marketed products; the effectiveness of
advertising and other promotional campaigns; the timely and successful
implementation of strategic initiatives; the results of any pending or future
litigation, investigations or claims; the uncertainty associated with the
identification of and successful consummation and execution of external
corporate development initiatives and strategic partnering transactions; and
Allergan’s ability to obtain and successfully maintain a sufficient supply of
products to meet market demand in a timely manner. In addition, U.S. and
international economic conditions, including higher unemployment, political
instability, financial hardship, consumer confidence and debt levels,
taxation, changes in interest and currency exchange rates, international
relations, capital and credit availability, the status of financial markets
and institutions, fluctuations or devaluations in the value of sovereign
government debt, as well as the general impact of continued economic
volatility, can materially affect Allergan’s results. Therefore, the reader is
cautioned not to rely on these forward-looking statements. Allergan expressly
disclaims any intent or obligation to update these forward-looking statements
except as required to do so by law.

Additional information concerning the above-referenced risk factors and other
risk factors can be found in press releases issued by Allergan, as well as
Allergan’s public periodic filings with the U.S. Securities and Exchange
Commission, including the discussion under the heading “Risk Factors” in
Allergan’s 2012 Annual Report on Form 10-K and any subsequent Quarterly
Reports on Form 10-Q. Copies of Allergan’s press releases and additional
information about Allergan are available at www.allergan.com or you can
contact the Allergan Investor Relations Department by calling 714-246-4636.

About Allergan, Inc.

Allergan is a multi-specialty health care company established more than 60
years ago with a commitment to uncover the best of science and develop and
deliver innovative and meaningful treatments to help people reach their life’s
potential. Today, we have approximately 11,400 highly dedicated and talented
employees, global marketing and sales capabilities with a presence in more
than 100 countries, a rich and ever-evolving portfolio of pharmaceuticals,
biologics, medical devices and over-the-counter consumer products, and
state-of-the-art resources in R&D, manufacturing and safety surveillance that
help millions of patients see more clearly, move more freely and express
themselves more fully. From our beginnings as an eye care company to our focus
today on several medical specialties, including eye care, neurosciences,
medical aesthetics, medical dermatology, breast aesthetics, obesity
intervention and urologics, Allergan is proud to celebrate more than 60 years
of medical advances and proud to support the patients and physicians who rely
on our products and the employees and communities in which we live and work.
For more information regarding Allergan, go to: www.allergan.com.

® and ™ marks owned by Allergan, Inc.

ALLERGAN, INC.

Condensed Consolidated Statements of Earnings and

Reconciliation of Non-GAAP Adjustments

(Unaudited)
                                                                                                                        
                     Three months ended
In millions,
except per           September 30, 2013                                                   September 30, 2012
share amounts
                                                                                                         
                     GAAP            Non-GAAP                         Non-GAAP            GAAP            Non-GAAP                      Non-GAAP
                                     Adjustments                                                          Adjustments
Revenues
Product net          $ 1,528.4       $   --                           $ 1,528.4           $ 1,353.7       $   --                        $ 1,353.7
sales
Other revenues        30.3            --                           30.3              22.8            --                        22.8    
                       1,558.7           --                             1,558.7             1,376.5           --                          1,376.5
                                                                                                                                        
Operating
costs and
expenses
Cost of sales
(excludes
amortization           192.2             --                             192.2               182.9             --                          182.9
of intangible
assets)
Selling,
general and            589.3             (6.4  ) ^(a)(b)(c)(d)(e)       582.9               522.9             (3.3  ) ^(m)(n)(o)(p)       519.6
administrative
Research and           257.6             (6.7  ) ^(d)(e)                250.9               289.8             (62.5 ) ^(p)               227.3
development
Amortization
of intangible          28.8              (27.7 ) ^(f)                   1.1                 22.8              (17.0 ) ^(f)                5.8
assets
Restructuring         0.6             (0.6  ) ^(g)                  --                0.6             (0.6  ) ^(g)               --      
charges
                                                                                                                                        
Operating              490.2             41.4                           531.6               357.5             83.4                        440.9
income
                                                                                                                                        
Non-operating
income
(expense)
Interest               1.5               --                             1.5                 1.9               --                          1.9
income
Interest               (19.4   )         0.1     ^(h)                   (19.3   )           (15.9   )         --                          (15.9   )
expense
Other, net            (15.5   )        7.6    ^(i)                  (7.9    )          (9.2    )        7.1    ^(i)               (2.1    )
                      (33.4   )        7.7                          (25.7   )          (23.2   )        7.1                       (16.1   )
                                                                                                                                        
Earnings from
continuing
operations             456.8             49.1                           505.9               334.3             90.5                        424.8
before income
taxes
                                                                                                                                        
Provision for         123.9           12.2   ^(j)                  136.1             81.4            24.1   ^(q)               105.5   
income taxes
                                                                                                                                        
Earnings from
continuing             332.9             36.9                           369.8               252.9             66.4                        319.3
operations

Discontinued
operations:
Earnings
(loss) from
discontinued
operations,
net of income                                                                                                                      
tax expense                                      ^(k)                                                                 ^(k)
(benefit) of           5.5               (5.5  )                        --                  (2.3    )         2.3                         --
$2.7 million
and $(1.2)
million,
respectively
Expected loss
on sale of
discontinued
operations,           (37.6   )        37.6   ^(l)                  --                --              --                        --      
net of income
tax benefit of
$21.1 million
                                                                                                                                        
Discontinued          (32.1   )        32.1                         --                (2.3    )        2.3                       --      
operations
                                                                                                                                        
Net earnings           300.8             69.0                           369.8               250.6             68.7                        319.3
                                                                                                                                        
Net earnings
attributable
to                    1.0             --                           1.0               1.2             --                        1.2     
noncontrolling
interest
                                                                                                                                        
Net earnings
attributable         $ 299.8        $   69.0                        $ 368.8            $ 249.4        $   68.7                     $ 318.1   
to Allergan,
Inc.
                                                                                                                                        
Basic earnings
per share
attributable
to Allergan,
Inc.
stockholders:
Continuing           $ 1.12                                           $ 1.24              $ 0.84                                        $ 1.06
operations
Discontinued          (0.11   )                                       --                (0.01   )                                    --      
operations
Net basic
earnings per
share
attributable         $ 1.01                                          $ 1.24             $ 0.83                                       $ 1.06    
to Allergan,
Inc.
stockholders
                                                                                                                                        
Diluted
earnings per
share
attributable
to Allergan,
Inc.
stockholders:
Continuing           $ 1.10                                           $ 1.23              $ 0.82                                        $ 1.04
operations
Discontinued          (0.10   )                                       --                --                                          --      
operations
Net diluted
earnings per
share
attributable         $ 1.00                                          $ 1.23             $ 0.82                                       $ 1.04    
to Allergan,
Inc.
stockholders
                                                                                                                                        
Weighted
average number
of common
shares
outstanding:
Basic                  296.5                                            296.5               300.1                                         300.1
Diluted                300.7                                            300.7               305.3                                         305.3
                                                                                                                                        
Selected
ratios as a
percentage of
product net
sales
                                                                                                                                        
Cost of sales
(excludes
amortization           12.6    %                                        12.6    %           13.5    %                                     13.5    %
of intangible
assets)
Selling,
general and            38.6    %                                        38.1    %           38.6    %                                     38.4    %
administrative
Research and           16.9    %                                        16.4    %           21.4    %                                     16.8    %
development
                                                                                                                                        

        Expenses from changes in fair value of contingent consideration of
(a)   $1.5 million and integration and transaction costs of $3.0 million
        associated with business combinations
        External costs of $0.1 million for stockholder derivative litigation
(b)     costs associated with the U.S. Department of Justice (DOJ) settlement
        announced in September 2010
(c)     Transaction costs of $0.3 million associated with a licensing
        agreement with Medytox, Inc.
        Expenses related to the realignment of various business functions of
(d)     $1.6 million, consisting of selling, general and administrative
        expenses of $1.4 million and research and development expenses of $0.2
        million
        Upfront licensing fee of $6.5 million included in research and
        development expenses associated with a license and collaboration
(e)     agreement for technology that has not achieved regulatory approval and
        related transaction costs of $0.1 million included in selling, general
        and administrative expenses
(f)     Amortization of certain intangible assets related to business
        combinations, asset acquisitions and product licenses
(g)     Net restructuring charges
(h)     Interest expense associated with changes in estimated taxes related to
        uncertain tax positions included in prior year filings
(i)     Unrealized loss on the mark-to-market adjustment to derivative
        instruments
(j)     Total tax effect for non-GAAP pre-tax adjustments and other income tax
        adjustments, consisting of the following amounts (in millions):

                                                            Tax effect
          Non-GAAP pre-tax adjustments of $49.1 million             $  (14.2 )
          Estimated impact of the retroactive U.S. Research           2.0   
          and Development tax credit for 2012
                                                                    $  (12.2 )

(k)   Earnings (loss) from discontinued operations associated with the
        planned sale of the obesity intervention business unit
(l)     Expected loss on the sale of discontinued operations
(m)     Expenses from changes in fair value of contingent consideration of
        $2.4 million associated with business combinations
(n)     External costs of $0.5 million for stockholder derivative litigation
        costs associated with the DOJ settlement announced in September 2010
(o)     Expenses related to the realignment of various business functions of
        $0.3 million
        Upfront licensing fees of $62.5 million included in research and
        development expenses associated with the license and collaboration
(p)     agreements with Molecular Partners AG for technology that has not
        achieved regulatory approval and related transaction costs of $0.1
        million included in selling, general and administrative expenses
(q)     Total tax effect for non-GAAP pre-tax adjustments
        

“GAAP” refers to financial information presented in accordance with generally
accepted accounting principles in the United States.

This press release includes non-GAAP financial measures, as defined in
Regulation G promulgated by the U.S. Securities and Exchange Commission, with
respect to the three and nine months ended September 30, 2013 and September
30, 2012 and with respect to anticipated results for the fourth quarter and
full year of 2013. Allergan believes that its presentation of non-GAAP
financial measures provides useful supplementary information to investors
regarding its operational performance because it enhances an investor’s
overall understanding of the financial performance and prospects for the
future of Allergan’s core business activities by providing a basis for the
comparison of results of core business operations between current, past and
future periods. The presentation of historical non-GAAP financial measures is
not meant to be considered in isolation from or as a substitute for results as
reported under GAAP.

In this press release, Allergan reported the non-GAAP financial measures
“non-GAAP basic and diluted earnings per share attributable to Allergan, Inc.
stockholders” and “non-GAAP earnings attributable to Allergan, Inc.” and its
subcomponents “non-GAAP other revenue,” “non-GAAP cost of sales,” “non-GAAP
selling, general and administrative expenses,” “non-GAAP research and
development expenses,” “non-GAAP amortization of intangible assets,” “non-GAAP
impairment of intangible assets and related costs,” “non-GAAP restructuring
charges,” “non-GAAP operating income,” “non-GAAP interest expense,” “non-GAAP
other, net,” “non-GAAP earnings from continuing operations before income
taxes,” “non-GAAP provision for income taxes,” “non-GAAP earnings (loss) from
discontinued operations,” “non-GAAP expected loss on sale of discontinued
operations,” and “non-GAAP net earnings.” Allergan uses non-GAAP earnings to
enhance the investor’s overall understanding of the financial performance and
prospects for the future of Allergan’s core business activities. Non-GAAP
earnings is one of the primary indicators management uses for planning and
forecasting in future periods, including trending and analyzing the core
operating performance of Allergan’s business from period to period without the
effect of the non-core business items indicated. Management uses non-GAAP
earnings to prepare operating budgets and forecasts and to measure Allergan’s
performance against those budgets and forecasts on a corporate and segment
level. Allergan also uses non-GAAP earnings for evaluating management
performance for compensation purposes.

Despite the importance of non-GAAP earnings in analyzing Allergan’s underlying
business, the budgeting and forecasting process and designing incentive
compensation, non-GAAP earnings has no standardized meaning defined by GAAP.
Therefore, non-GAAP earnings has limitations as an analytical tool, and should
not be considered in isolation, or as a substitute for analysis of Allergan’s
results as reported under GAAP. Some of these limitations are:

  *it does not reflect cash expenditures, or future requirements, for
    expenditures relating to restructurings, legal settlements, and certain
    acquisitions, including severance and facility transition costs associated
    with acquisitions;
  *it does not reflect asset impairment charges or gains or losses on the
    disposition of assets associated with restructuring and business exit
    activities;
  *it does not reflect the tax benefit or tax expense associated with the
    items indicated;
  *it does not reflect the impact on earnings of charges or income resulting
    from certain matters Allergan considers not to be indicative of its
    on-going operations; and
  *other companies in Allergan’s industry may calculate non-GAAP earnings
    differently than it does, which may limit its usefulness as a comparative
    measure.

Allergan compensates for these limitations by using non-GAAP earnings only to
supplement net earnings on a basis prepared in conformance with GAAP in order
to provide a more complete understanding of the factors and trends affecting
its business. Allergan strongly encourages investors to consider both net
earnings and cash flows determined under GAAP as compared to non-GAAP
earnings, and to perform their own analysis, as appropriate.

In this press release, Allergan also reported sales performance using the
non-GAAP financial measure of constant currency sales. Constant currency sales
represent current period reported sales adjusted for the translation effect of
changes in average foreign exchange rates between the current period and the
corresponding period in the prior year. Allergan calculates the currency
effect by comparing adjusted current period reported amounts, calculated using
the monthly average foreign exchange rates for the corresponding period in the
prior year, to the actual current period reported amounts. Management refers
to growth rates at constant currency so that sales results can be viewed
without the impact of changing foreign currency exchange rates, thereby
facilitating period-to-period comparisons of Allergan’s sales. Generally, when
the dollar either strengthens or weakens against other currencies, the growth
at constant currency rates will be higher or lower, respectively, than growth
reported at actual exchange rates.

Reporting sales performance using constant currency sales has the limitation
of excluding currency effects from the comparison of sales results over
various periods, even though the effect of changing foreign currency exchange
rates has an actual effect on Allergan’s operating results. Investors should
consider these effects in their overall analysis of Allergan’s operating
results.

ALLERGAN, INC.

Condensed Consolidated Statements of Earnings and

Reconciliation of Non-GAAP Adjustments

(Unaudited)
                                                                                                                         
                     Nine months ended
In millions,
except per           September 30, 2013                                                   September 30, 2012
share amounts
                                                                                                         
                     GAAP            Non-GAAP                           Non-GAAP          GAAP            Non-GAAP                      Non-GAAP
                                     Adjustments                                                          Adjustments
Revenues
Product net          $ 4,537.9       $  --                              $ 4,537.9         $ 4,101.5       $  --                         $ 4,101.5
sales
Other revenues        78.1           --                              78.1            73.0           --                         73.0    
                       4,616.0          --                                4,616.0           4,174.5          --                           4,174.5
                                                                                                                                        
Operating
costs and
expenses
Cost of sales
(excludes
amortization           591.2            (9.0   ) ^(a)(b)                  582.2             568.2            (0.4   ) ^(p)(q)             567.8
of intangible
assets)
Selling,
general and            1,804.0          (28.5  ) ^(b)(c)(d)(e)(f)         1,775.5           1,650.8          (26.1  ) ^(q)(r)(s)(t)       1,624.7
administrative
Research and           772.9            (7.4   ) ^(e)(f)                  765.5             737.5            (62.8  ) ^(s)(t)             674.7
development
Amortization
of intangible          88.5             (80.4  ) ^(g)                     8.1               67.2             (49.5  ) ^(g)                17.7
assets
Restructuring         4.9            (4.9   ) ^(h)                    --              1.5            (1.5   ) ^(h)               --      
charges
                                                                                                                                        
Operating              1,354.5          130.2                             1,484.7           1,149.3          140.3                        1,289.6
income
                                                                                                                                        
Non-operating
income
(expense)
Interest               5.1              --                                5.1               4.8              --                           4.8
income
Interest               (56.8   )        0.3      ^(i)                     (56.5   )         (48.8   )        0.8      ^(i)                (48.0   )
expense
Other, net            (13.0   )       (1.3   ) ^(j)(k)(l)              (14.3   )        (19.3   )       15.2    ^(u)               (4.1    )
                      (64.7   )       (1.0   )                         (65.7   )        (63.3   )       16.0                       (47.3   )
                                                                                                                                        
Earnings from
continuing
operations             1,289.8          129.2                             1,419.0           1,086.0          156.3                        1,242.3
before income
taxes
                                                                                                                                        
Provision for         329.9          51.3    ^(m)                   381.2           307.6          32.2    ^(v)               339.8   
income taxes
                                                                                                                                        
Earnings from
continuing             959.9            77.9                              1,037.8           778.4            124.1                        902.5
operations
                                                                                                                                        
Discontinued
operations:
Earnings
(loss) from
discontinued
operations,
net of income                                                                                                                      
tax expense                                      ^(n)                                                                 ^(n)
(benefit) of           13.1             (13.1  )                          --                (1.1    )        1.1                          --
$6.4 million
and $(1.0)
million,
respectively
Expected loss
on sale of
discontinued
operations,           (296.6  )       296.6   ^(o)                    --              --             --                         --      
net of income
tax benefit of
$108.3 million
                                                                                                                                        
Discontinued          (283.5  )       283.5                           --              (1.1    )       1.1                        --      
operations
                                                                                                                                        
Net earnings           676.4            361.4                             1,037.8           777.3            125.2                        902.5
                                                                                                                                        
Net earnings
attributable
to                    4.2            --                              4.2             2.7            --                         2.7     
noncontrolling
interest
                                                                                                                                        
Net earnings
attributable         $ 672.2        $  361.4                          $ 1,033.6        $ 774.6        $  125.2                     $ 899.8   
to Allergan,
Inc.
                                                                                                                                        
Basic earnings
per share
attributable
to Allergan,
Inc.
stockholders:
Continuing           $ 3.22                                             $ 3.48            $ 2.57                                        $ 2.98
operations
Discontinued          (0.95   )                                         --              (0.01   )                                    --      
operations
Net basic
earnings per
share
attributable         $ 2.27                                            $ 3.48           $ 2.56                                       $ 2.98    
to Allergan,
Inc.
stockholders
                                                                                                                                        
Diluted
earnings per
share
attributable
to Allergan,
Inc.
stockholders:
Continuing           $ 3.17                                             $ 3.42            $ 2.52                                        $ 2.92
operations
Discontinued          (0.94   )                                         --              --                                          --      
operations
Net diluted
earnings per
share
attributable         $ 2.23                                            $ 3.42           $ 2.52                                       $ 2.92    
to Allergan,
Inc.
stockholders
                                                                                                                                        
Weighted
average number
of common
shares
outstanding:
Basic                  296.7                                              296.7             302.1                                         302.1
Diluted                301.9                                              301.9             307.7                                         307.7
                                                                                                                                        
Selected
ratios as a
percentage of
product net
sales
                                                                                                                                        
Cost of sales
(excludes
amortization           13.0    %                                          12.8    %         13.9    %                                     13.8    %
of intangible
assets)
Selling,
general and            39.8    %                                          39.1    %         40.2    %                                     39.6    %
administrative
Research and           17.0    %                                          16.9    %         18.0    %                                     16.5    %
development
                                                                                                                                        

(a)   Fair market value inventory adjustment rollout of $8.9 million
        associated with the acquisition of SkinMedica, Inc.
        Expenses from changes in fair value of contingent consideration of
        $4.8 million included in selling, general and administrative expenses
(b)     and integration and transaction costs of $18.2 million associated with
        business combinations, consisting of cost of sales of $0.1 million and
        selling, general and administrative expenses of $18.1 million
        Aggregate charges of $3.6 million for external costs for stockholder
(c)     derivative litigation costs associated with the DOJ settlement
        announced in September 2010 and other legal contingency expenses
(d)     Transaction costs of $0.3 million associated with a licensing
        agreement with Medytox, Inc.
        Expenses related to the realignment of various business functions of
(e)     $2.5 million, consisting of selling, general and administrative
        expenses of $1.6 million and research and development expenses of $0.9
        million
        Upfront licensing fee of $6.5 million included in research and
        development expenses associated with a license and collaboration
(f)     agreement for technology that has not achieved regulatory approval and
        related transaction costs of $0.1 million included in selling, general
        and administrative expenses
(g)     Amortization of certain intangible assets related to business
        combinations, asset acquisitions and product licenses
(h)     Net restructuring charges
(i)     Interest expense associated with changes in estimated taxes related to
        uncertain tax positions included in prior year filings
(j)     Unrealized gain of $4.3 million on the mark-to-market adjustment to
        derivative instruments
(k)     Gain on sale of investments of $0.7 million
(l)     Impairment of a non-marketable equity investment of $3.7 million
(m)     Total tax effect for non-GAAP pre-tax adjustments and other income tax
        adjustments, consisting of the following amounts (in millions):

                                                            Tax effect
          Non-GAAP pre-tax adjustments of $129.2 million            $  (35.9 )
          Estimated impact of the retroactive U.S. Research           (15.4 )
          and Development tax credit for 2012
                                                                    $  (51.3 )

(n)   Earnings (loss) from discontinued operations associated with the
        planned sale of the obesity intervention business unit
(o)     Expected loss on the sale of discontinued operations
        Fair market value inventory adjustment rollout of $0.3 million
(p)     associated with the purchase of a distributor’s business in Russia
        related to Allergan’s products
        Expenses from changes in fair value of contingent consideration of
        $15.8 million included in selling, general and administrative expenses
(q)     and integration and transaction costs of $0.6 million associated with
        business combinations, consisting of cost of sales of $0.1 million and
        selling, general and administrative expenses of $0.5 million
        Aggregate charges of $8.9 million for external costs for stockholder
(r)     derivative litigation associated with the DOJ settlement announced in
        September 2010 and other legal contingency expenses
        Expenses related to the realignment of various business functions of
(s)     $1.1 million, consisting of selling, general and administrative
        expenses of $0.8 million and research and development expenses of $0.3
        million
        Upfront licensing fees of $62.5 million included in research and
        development expenses associated with the license and collaboration
(t)     agreements with Molecular Partners AG for technology that has not
        achieved regulatory approval and related transaction costs of $0.1
        million included in selling, general and administrative expenses
(u)     Unrealized loss on the mark-to-market adjustment to derivative
        instruments
(v)     Total tax effect for non-GAAP pre-tax adjustments and other income tax
        adjustments, consisting of the following amounts (in millions):

                                                            Tax effect
          Non-GAAP pre-tax adjustments of $156.3 million            $  (38.9 )
          Change in estimated taxes related to uncertain tax          6.7   
          positions included in prior year filings
                                                                    $  (32.2 )
                                                                    

ALLERGAN, INC.

Condensed Consolidated Balance Sheets

(Unaudited)
                                                        
                                            September 30,         December 31,
in millions
                                            2013                  2012
                                                                  
Assets
                                                                  
Cash and equivalents                        $  2,686.3            $ 2,701.8
Short-term investments                         524.6                260.6
Trade receivables, net                         908.2                739.0
Inventories                                    280.0                272.3
Other current assets                           440.0                448.6
Assets held for sale                          93.3               512.6    
                                                                  
Total current assets                           4,932.4              4,934.9
                                                                  
Property, plant and equipment,                 877.0                851.5
net
Intangible assets, net                         1,689.4              860.1
Goodwill                                       2,334.0              2,133.8
Other noncurrent assets                       311.8              399.0    
                                                                  
Total assets                                $  10,144.6          $ 9,179.3  
                                                                  
                                                                  
Liabilities and equity
                                                                  
Notes payable                               $  37.2               $ 48.8
Accounts payable                               267.8                232.2
Other accrued expenses and income              891.4                809.2
taxes
Liabilities held for sale                     3.3                5.3      
                                                                  
Total current liabilities                      1,199.7              1,095.5
                                                                  
Long-term debt                                 2,101.5              1,512.4
Other liabilities                              730.3                708.8
                                                                  
Equity:
Allergan, Inc. stockholders’                   6,085.9              5,837.1
equity
Noncontrolling interest                       27.2               25.5     
Total equity                                  6,113.1            5,862.6  
                                                                  
Total liabilities and equity                $  10,144.6          $ 9,179.3  
                                                                  
DSO                                            54                   47
                                                                  
DOH                                            133                  136
                                                                  
Cash and equivalents and                    $  3,210.9            $ 2,962.4
short-term investments
Total notes payable and long-term             (2,138.7 )          (1,561.2 )
debt
Cash and equivalents and
short-term investments, net of              $  1,072.2           $ 1,401.2  
debt
                                                                  
Debt-to-capital percentage                     25.9     %           21.0     %
                                                                  

ALLERGAN, INC.

Reconciliation of Non-GAAP Earnings and Diluted Earnings Per Share from
Continuing Operations

(Unaudited)
                          
In millions, except            Three months ended
per share amounts
                               September 30,              September 30,
                                2013                             2012
                                                                 
Earnings from                   $     332.9                      $   252.9
continuing operations
Less net earnings
attributable to                      1.0                          1.2    
noncontrolling
interest
Earnings from
continuing operations                331.9                          251.7
attributable to
Allergan, Inc.
                                                                 
Non-GAAP pre-tax
adjustments:
Expenses from changes
in fair value of
contingent
consideration and                    4.5                            2.4
integration and
transaction costs
associated with
business combinations
External costs for
stockholder
derivative litigation                0.1                            0.5
associated with the
DOJ settlement
Transaction costs
associated with a                    0.3                            --
licensing agreement
with Medytox, Inc.
Expenses related to
the realignment of                   1.6                            0.3
various business
functions
Research and
development expenses
related to an upfront
licensing fee
associated with a
license and                                                         
collaboration                         6.6
agreement for                                                       --
technology that has
not achieved
regulatory approval
and related
transaction costs
Amortization of                      27.7                           17.0
intangible assets
Net restructuring                    0.6                            0.6
charges
Interest expense
associated with
changes in estimated
taxes related to                     0.1                            --
uncertain tax
positions included in
prior year filings
Unrealized loss on
derivative                           7.6                            7.1
instruments
Research and
development expenses
related to upfront
licensing fees
associated with the
license and                                                         
collaboration                         --                                  
agreements with                                                     62.6
Molecular Partners AG
for technology that
has not achieved
regulatory approval
and related
transaction costs
                                     381.0                          342.2
                                                                 
Tax effect for above                 (14.2 )                        (24.1  )
items
Estimated impact of
the retroactive U.S.
Research and                         2.0                          --     
Development tax
credit for 2012
Non-GAAP earnings
from continuing                 $     368.8                     $   318.1  
operations
                                                                 
Weighted average
number of shares                     296.5                          300.1
outstanding
                                                                 
Net shares assumed
issued using the
treasury stock method
for

options and                                                         
non-vested equity                     4.2                                 
shares and share                                                    5.2
units outstanding

during each period
based on average
market price
                                     300.7                        305.3  
                                                                 
Diluted earnings per
share from continuing             $  1.10                       $   0.82
operations
                                                                 
Non-GAAP earnings per
share adjustments:
Expenses from changes
in fair value of
contingent
consideration and                     0.02                           0.01
integration and
transaction costs
associated with
business combinations
Research and
development expenses
related to an upfront
licensing fee
associated with a
license and                                                         
collaboration
agreement for                         0.02                           --
technology that has
not achieved
regulatory approval
and related
transaction costs
Amortization of                       0.06                           0.05
intangible assets
Unrealized loss on
derivative                            0.02                           0.01
instruments
Estimated impact of
the retroactive U.S.
Research and                          0.01                           --
Development tax
credit for 2012
Research and
development expenses
related to upfront
licensing fees
associated with the
license and                                                         
collaboration                                                            
agreements with                       --                             0.15
Molecular Partners AG
for technology that
has not achieved
regulatory approval
and related
transaction costs
Non-GAAP diluted
earnings per share                 $  1.23                      $   1.04   
from continuing
operations
                                                                 
Year over year change                               18.3 %
                                                                 

ALLERGAN, INC.

Reconciliation of Non-GAAP Earnings and Diluted Earnings Per Share from
Continuing Operations

(Unaudited)
                               
In millions, except per             Nine months ended
share amounts
                                    September 30,           September 30,
                                      2013                       2012
                                                                 
Earnings from continuing              $   959.9                  $   778.4
operations
Less net earnings
attributable to                          4.2                      2.7    
noncontrolling interest
Earnings from continuing
operations attributable to               955.7                      775.7
Allergan, Inc.
                                                                 
Non-GAAP pre-tax
adjustments:
Fair market value inventory
adjustment rollout
associated with the                      8.9                        0.3
purchase of various
businesses
Expenses from changes in
fair value of contingent
consideration and                        23.0                       16.4
integration and transaction
costs associated with
business combinations
Aggregate charges for
external costs for
stockholder derivative
litigation associated with               3.6                        8.9
the DOJ settlement and
other legal contingency
expenses
Transaction costs
associated with a licensing              0.3                        --
agreement with Medytox,
Inc.
Expenses related to the
realignment of various                   2.5                        1.1
business functions
Research and development
expenses related to an
upfront licensing fee
associated with a license                                           
and collaboration agreement               6.6
for technology that has not                                         --
achieved regulatory
approval and related
transaction costs
Amortization of intangible               80.4                       49.5
assets
Net restructuring charges                4.9                        1.5
Interest expense associated
with changes in estimated
taxes related to uncertain               0.3                        0.8
tax positions included in
prior year filings
Unrealized (gain) loss on                (4.3    )                  15.2
derivative instruments
Gain on sale of investments              (0.7    )                  --
Impairment of a
non-marketable equity                    3.7                        --
investment
Research and development
expenses related to upfront
licensing fees associated
with the license and                                                
collaboration agreements                  --                              
with Molecular Partners AG                                          62.6
for technology that has not
achieved regulatory
approval and related
transaction costs
                                         1,084.9                    932.0
                                                                 
Tax effect for above items               (35.9   )                  (38.9  )
Estimated impact of the
retroactive U.S. Research                (15.4   )                  --
and Development tax credit
for 2012
Change in estimated taxes
related to uncertain tax                 --                       6.7    
positions included in prior
year filings
Non-GAAP earnings from                $   1,033.6               $   899.8  
continuing operations
                                                                 
Weighted average number of               296.7                      302.1
shares outstanding
                                                                 
Net shares assumed issued
using the treasury stock
method for
                                                                    
options and non-vested                    5.2                             
equity shares and share                                             5.6
units outstanding

during each period based on
average market price
                                         301.9                    307.7  
                                                                            
Diluted earnings per share             $ 3.17                   $   2.52
from continuing operations
                                                                 
Non-GAAP earnings per share
adjustments:
Fair market value inventory
adjustment rollout
associated with the                       0.02                       --
purchase of various
businesses
Expenses from changes in
fair value of contingent
consideration and                         0.06                       0.05
integration and transaction
costs associated with
business combinations
Aggregate charges for
external costs for
stockholder derivative
litigation associated with                0.01                       0.03
the DOJ settlement and
other legal contingency
expenses
Research and development
expenses related to an
upfront licensing fee
associated with a license                                           
and collaboration agreement
for technology that has not               0.02                       --
achieved regulatory
approval and related
transaction costs
Amortization of intangible                0.18                       0.12
assets
Net restructuring charges                 0.01                       --
Unrealized (gain) loss on                 (0.01   )                  0.03
derivative instruments
Impairment of a
non-marketable equity                     0.01                       --
investment
Estimated impact of the
retroactive U.S. Research                 (0.05   )                  --
and Development tax credit
for 2012
Research and development
expenses related to upfront
licensing fees associated
with the license and                                                
collaboration agreements
with Molecular Partners AG                --                         0.15
for technology that has not
achieved regulatory
approval and related
transaction costs
Change in estimated taxes
related to uncertain tax                 --                       0.02   
positions included in prior
year filings
                                                                 
Non-GAAP diluted earnings
per share from continuing               $ 3.42                  $   2.92   
operations
                                                                 
Year over year change                                     17.1 %
                                                                 

ALLERGAN, INC.

Supplemental Non-GAAP Information

(Unaudited)
                                                                                                                
                            Three months ended                                                         
                            September       September       $ change in net sales                       Percent change in net sales
                            30,             30,
                              2013            2012          Total       Performance     Currency        Total      Performance     Currency
in millions
Eye Care                    $ 717.1         $ 663.2         $ 53.9      $   59.7        $ (5.8  )       8.1  %     9.0     %       (0.9  )%
Pharmaceuticals
Botox/Neuromodulators         485.7           431.6           54.1          60.2          (6.1  )       12.5 %     13.9    %       (1.4  )%
Skin Care and Other          127.0         83.7          43.3         43.5         (0.2  )       51.7 %     52.0    %       (0.3  )%
Total Specialty              1,329.8       1,178.5       151.3        163.4        (12.1 )       12.8 %     13.9    %       (1.1  )%
Pharmaceuticals
                                                                                                                                   
Breast Aesthetics             91.9            86.1            5.8           6.5           (0.7  )       6.7  %     7.5     %       (0.8  )%
Facial Aesthetics            106.7         89.1          17.6         19.0         (1.4  )       19.8 %     21.3    %       (1.5  )%
Total Medical Devices        198.6         175.2         23.4         25.5         (2.1  )       13.4 %     14.6    %       (1.2  )%
                                                                                                                                   
Product net sales           $ 1,528.4      $ 1,353.7      $ 174.7     $   188.9       $ (14.2 )       12.9 %     14.0    %       (1.1  )%
                                                                                                                                   
Selected Product Net
Sales (a):
Alphagan P, Alphagan,       $ 112.4         $ 111.3         $ 1.1       $   2.3         $ (1.2  )       1.0  %     2.1     %       (1.1  )%
and Combigan
Lumigan Franchise             153.5           152.0           1.5           0.8           0.7           1.0  %     0.5     %       0.5   %
Total Glaucoma                267.9           265.8           2.1           2.7           (0.6  )       0.8  %     1.0     %       (0.2  )%
Products
Restasis                      239.3          198.3           41.0          42.0          (1.0  )       20.7 %     21.2    %       (0.5  )%
Latisse                       24.4            23.4            1.0           1.2           (0.2  )       4.3  %     4.9     %       (0.6  )%
                                                                                                                                   
Domestic                      62.5    %       62.1    %
International                 37.5    %       37.9    %
                                                                                                                                   

ALLERGAN, INC.

Supplemental Non-GAAP Information

(Unaudited)
                                                                                                                 
                              Nine months ended                                                          
                              September       September       $ change in net sales                       Percent change in net sales
                              30,             30,
                                2013            2012          Total       Performance     Currency        Total      Performance     Currency
in millions
Eye Care                      $ 2,108.1       $ 1,986.1       $ 122.0     $   134.1       $ (12.1 )       6.1  %     6.8     %       (0.7  )%
Pharmaceuticals
Botox/Neuromodulators           1,456.6         1,291.7         164.9         176.0         (11.1 )       12.8 %     13.6    %       (0.8  )%
Skin Care and Other            344.6         252.8         91.8         92.1         (0.3  )       36.3 %     36.4    %       (0.1  )%
Total Specialty                3,909.3       3,530.6       378.7        402.2        (23.5 )       10.7 %     11.4    %       (0.7  )%
Pharmaceuticals
                                                                                                                                     
Breast Aesthetics               288.3           285.7           2.6           3.9           (1.3  )       0.9  %     1.4     %       (0.5  )%
Facial Aesthetics              340.3         285.2         55.1         57.2         (2.1  )       19.3 %     20.1    %       (0.8  )%
Total Medical Devices          628.6         570.9         57.7         61.1         (3.4  )       10.1 %     10.7    %       (0.6  )%
                                                                                                                                     
Product net sales             $ 4,537.9      $ 4,101.5      $ 436.4     $   463.3       $ (26.9 )       10.6 %     11.3    %       (0.7  )%
                                                                                                                                     
Selected Product Net
Sales (a):
Alphagan P, Alphagan,         $ 349.2         $ 334.7         $ 14.5      $   16.4        $ (1.9  )       4.3  %     4.9     %       (0.6  )%
and Combigan
Lumigan Franchise               452.7           452.4           0.3           --            0.3           0.1  %     --              0.1   %
Total Glaucoma                  808.7           794.9           13.8          15.6          (1.8  )       1.7  %     2.0     %       (0.3  )%
Products
Restasis                        662.4           580.0           82.4          83.5          (1.1  )       14.2 %     14.4    %       (0.2  )%
Latisse                         76.6            72.4            4.2           4.5           (0.3  )       5.8  %     6.2     %       (0.4  )%
                                                                                                                                     
Domestic                        61.5    %       60.8    %
International                   38.5    %       39.2    %
                                                                                                                                     

        Percentage change in selected product net sales is calculated on
(a)   amounts reported to the nearest whole dollar. Total glaucoma products
        include the Alphagan and Lumigan franchises.
        

ALLERGAN, INC.

Reconciliation of GAAP Diluted Earnings Per Share Expectations

To Non-GAAP Diluted Earnings Per Share Expectations

(Unaudited)
                                             
                                                   Fourth Quarter 2013
                                                   Low           High
                                                                     
GAAP diluted earnings per share
attributable to Allergan, Inc.                     $ 1.25            $ 1.27
stockholders from continuing operations
expectations ^(a)
                                                                     
Amortization of intangible assets                   0.06            0.06  
Non-GAAP diluted earnings per share from           $ 1.31           $ 1.33  
continuing operations expectations
                                                                     
                                                                     
                                                   Full Year 2013
                                                   Low               High
                                                                     
GAAP diluted earnings per share
attributable to Allergan, Inc.                     $ 4.43            $ 4.45
stockholders from continuing operations
expectations ^(a)
                                                                     
Fair market value inventory adjustment
rollout associated with the purchase of              0.02              0.02
various businesses
Expenses from changes in fair value of
contingent consideration and integration             0.06              0.06
and transaction costs associated with
business combinations
Aggregate charges for external costs for
stockholder derivative litigation                    0.01              0.01
associated with the DOJ settlement and
other legal contingency expenses
Research and development expenses
related to an upfront licensing fee                                   
associated with a license and
collaboration agreement for technology               0.02              0.02
that has not achieved regulatory
approval and related transaction costs
Amortization of intangible assets                    0.24              0.24
Net restructuring charges                            0.01              0.01
Unrealized gain on derivative                        (0.01 )           (0.01 )
instruments
Impairment of a non-marketable equity                0.01              0.01
investment
Estimated impact of the retroactive U.S.
Research and Development tax credit for             (0.05 )          (0.05 )
2012
Non-GAAP diluted earnings per share from           $ 4.74           $ 4.76  
continuing operations expectations
                                                                     

        GAAP diluted earnings per share from continuing operations
        expectations exclude any potential impact of future unrealized gains
        or losses on derivative instruments, changes in contingent
(a)   consideration, integration and transaction costs associated with
        business combinations, restructuring charges and stockholder
        derivative and tax litigation costs related to the 2010 DOJ settlement
        and other legal contingency expenses that may occur but that are not
        currently known or determinable.

Contact:

Allergan
Jim Hindman (714) 246-4636 (investors)
Joann Bradley (714) 246-4766 (investors)
David Nakasone (714) 246-6376 (investors)
Bonnie Jacobs (714) 246-5134 (media)
Cathy Taylor (714) 246-5551 (media)
 
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